Response to the following problem:
Key comparative figures for both Research In Motion and Apple follow.
Research In Motion Apple
Current Prior Current Prior
($ millions) Year Year Year Year
Revenues (net sales) ... $14,953 $11,065 $42,905 $37,491
Cost of sales ... 8,369 5,968 25,683 24,294
Required
1. Compute the dollar amount of gross margin and the gross margin ratio for the two years shown for each of these companies.
2. Which company earns more in gross margin for each dollar of net sales? How do they compare to the industry average of 40.0%?
3. Did the gross margin ratio improve or decline for these companies?